The long term maintenance and function of stem cells depend on signals generated by the local stem cell microenvironment, or niche. While significant progress has been made in identifying the niche-generated factors necessary for stem cell regulation, little is known about the mechanisms that control stem cell responses to systemic changes such as nutritional status. In the fly ovary, germline stem cells (GSCs) and follicle stem cells (FSCs) proliferate actively in the presence of abundant food, but rapidly arres proliferation when nutrients are limited. Recently, we molecularly defined the mechanism that translates changes in nutrient status to FSC proliferation control. Specifically, we found that dietary cholesterol triggers release of Hedgehog (Hh) molecules sequestered by the Hh binding protein Boi on the surface of Hh-producing cells within the ovary. The resulting accumulation of Hh ligand in the FSC niche drives FSC proliferation. This mechanism enables a rapid, tissue-specific response to global changes in nutrient availability, thus tailoring ovarian stem cell divisions and egg production to environmental conditions that are sufficient for progeny survival. In addition, our preliminary work uncovers novel, axon-like cellular projections extended by FSCs that act in an integrin-dependent manner to orient FSC division and establish tracks of projections that position FSC daughters within the niche. FSC projections contact daughter cells and germline cysts, suggesting a role for FSC projections in mediating communication between cell types within the FSC niche. Like integrin mutation, changes in Hh signaling levels within the FSC niche lead to defects in the directionality, number, and length of FSC projections, suggesting a critical role for Hh signaling in regulation of projection morphology and maintenance. Based on these results, we propose that Hh tailors FSC divisions and egg production to systemic changes in nutrient availability in a two-step process that includes 1) Boi-mediated Hh sequestration/release and 2) subsequent regulation of communication between cells within the FSC niche via regulation of FSC projection dynamics.